TerraCap embarks on office buying spree

TerraCap Management LLC is closing out the final quarter of 2020 by embarking on an office buying spree in three of its target markets.

In three separate deals that have closed since Oct. 20, the 12-year-old company has acquired 10 office and flex buildings in Orlando, Denver and Plano, Texas for roughly $85 million.

Combined, the acquisitions have added about 575,000 square feet of space to the Estero-based investment company’s portfolio, which stands at seven million square feet and is valued at roughly $1.5 billion.

Most recently, the company closed on the purchase of two buildings within the Denver Technology Center for $28.7 million. Terrace at Orchard Station and 4949 S. Syracuse contain a combined 180,000 square feet of office space and are 93% occupied, the company says.

“Denver Tech Center continues to perform as one of the top office submarkets in our Denver portfolio,” says Chris Thompson, a TerraCap partner and director of asset management.

In Texas, TerraCap acquired a pair of two-story office buildings known as a Plano Office Center for roughly $35 million. Together, they comprise about 200,000 square feet of space and are 87% committed.

“North Dallas and Plano are strong contenders for corporate relocations predominantly from the West Coast,” says TerraCap founder and managing partner Steve Hagenbuckle. “Adding these two low-rise, Class A office buildings to our existing Plano assets will allow us to present tenants with more options and put our leasing team in a position of strength.”

In Orlando, the company bought a collection of six single-story office and flex buildings for $24 million.

Combined, the Orlando International Business Center contains 196,000 square feet and is 88% occupied.

Hagenbuckle says the deal was “consistent with our overall thesis and strategy.”

Both the Plano and Denver acquisitions are also within close proximity to other TerraCap assets.

“We feel these buildings will complement our holdings in the area,” Steve Good, another TerraCap partner and its director of acquisitions, says.

Prime Finance provided TerraCap with debt financing for both the Orlando and Plano transactions, while Colony Capital, together with CBRE Group aided the Denver purchase.

The spate of transactions come on the heels of a $27.6 million acquisition TerraCap completed in Atlanta in August for eight single-story buildings containing 297,000 square feet.

TerraCap has also been a seller in recent months. Early in November disposed of a trio of apartment projects in Greensboro, N.C., that it had purchased with Willow Creek Partners in mid-2017 for $36.2 million.

Together, the Madison Woods, Terrace at Olde Battleground and Terrace Oaks complexes contain 456 units. Prices could not be determined.

Albert Livingston, another TerraCap partner, says the company added value through “quality on-site management” and a capital improvement program that ultimately boosted occupancies and rental rates.  

Good notes that a pair of multifamily rental projects the company owns in Atlanta, which were purchased in 2017 as part of a four-property deal, also are likely to come to market before the end of the year.